Contraction

Contraction

In a business cycle, the time between the peak and the bottom. That is, a contraction occurs between the end of economic growth and the end of the subsequent recession. Contractions are characterized by layoffs, a decline in GDP, and other negative factors. However, historically, contractions have tended not to last as long as expansions.

For example, in comparison with the last business cycle recession phase lasting from December 2007 to June 2009, the corresponding softwood lumber industry contraction phase (C4) started 23 months earlier, in January 2006, and ended 3 months earlier in March 2009.

The Bayesian approach intuits that in any month that the CLI reaches a cyclical trough, the probability that the CLI is in its contraction phase (indicating that the economy is soon to slip into recession) equals zero.

The government economic report suggests that Japan's longest period of postwar economic boom, which started in February 2002, may have ended and that the world's second-biggest economy has entered a contraction phase.

said the revised GDP data confirmed that Japan's economy has entered into a contraction phase, but forecast that the downturn will be short-lived with recent falls in crude oil prices and expected recovery in exports.

Earlier this month, the government admitted in its monthly report that Japan's economy may have entered a contraction phase, indicating its longest period of postwar economic expansion since February 2002 may have ended.

It appears that after eight years of expansion in our economy and our real estate markets, we will enter a contraction phase in 2001," says Peter Korpacz, Director, Global Strategic Real Estate Research Group at PricewaterhouseCoopers.

Earlier this month, the government admitted in its monthly report that Japan's economy may have entered a contraction phase, indicating that the country's longest period of postwar economic expansion, since February 2002, may have ended.

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